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Competition law changes get dental industry's support

7th Oct 16

.Summary —

In a submission to The Treasury, the Australian Dental Industry Association (ADIA) has signalled the dental industry's support for proposed amendments to the Competition and Consumer Act (Cth) 2010 addressing misuse of market power, mergers, and secondary boycotts.

Key Issues For Consideration —

The Australian Government sought the views of ADIA on proposed changes to competition law set out in an exposure draft of the Competition and Consumer Amendment (Competition Policy Review) Bill 2016. Having sough advice from its members, ADIA has advised The Treasury that the legislation is supported.

The following outlines some of the key issues in the proposed legislation that have received the support of ADIA:

Misuse of market power —

Proposed amendments to Section 46 of the Competition and Consumer Act (Cth) 2010 have been supported. The underpinning principle is that all businesses should compete on merit (that is on the quality of their product, the efficiency of their production processes and the effectiveness of their marketing and distribution) and thus small business should not be protected from the rigours of merit based competition; however, it is important to ensure that large firms cannot use their market power to exclude an equally efficient competitor.

Concerted practices —

ADIA has supported the amendments to price signalling and concerted practice provisions to bring Australian law into line with international best practice. However, it will be important for the Australian Competition and Consumer Commission (ACCC) to adopt a measured approach to enforcement of this provision, particularly in the initial years as businesses adjust.

Mergers —

The proposed streamlining of the merger review process has been supported by ADIA; however, it has been noted that the Competition Policy Review also recommended a process for review of historical merger decisions. While a process of reviewing past merger decisions does not need to be empowered by legislation, it is an important aspect of the recommendation. Reviews of previous merger decisions will support confidence in the system and help combat calls for more extreme interventions such as the introduction of forced divestiture powers. The Australian Chamber urges the Government to ensure that this aspect of the recommendation is not overlooked.

Secondary boycotts —

ADIA has echoed calls made by the Australian Chamber of Commerce and Industry that supports the strengthening of penalties for secondary boycotts to bring them into line with other competition law offences. In this context, it has been argued that there is no reasonable justification as to why the maximum penalty for secondary boycotts should be at a level lower than penalties for other breaches of the competition law. As noted in the Explanatory Materials accompanying the Exposure Draft, secondary boycotts are harmful to trading freedom and competition. ADIA has supported the Australian Chamber's position that the practice of using secondary boycotts as an industrial weapon clearly warrants close ongoing attention.

ADIA's response to this matter was offered by way of advice to The Treasury that signalled strong support for the position of the Australian Chamber and its specific guidance tendered in respect to the exposure draft of the Competition and Consumer Amendment (Competition Policy Review) Bill 2016. A copy of the draft legislation and the accompanying explanatory memorandum can be accessed via the links below:

ADIA's support for competition policy reform is consistent with the objectives set out in the ADIA Advocacy Agenda that seek to provide an environment in which manufacturers and suppliers of dental products can grow, create jobs and operate sustainably.

Member engagement —

ADIA provides leadership, strategy, advocacy and support. Our members set our agenda, fund our activities and directly benefit from the results. With respect to matters associated with competition policy report, ADIA staff responsible for policy advocacy receive advice and guidance from members serving on the ADIA-BAC Business Affairs Committee.

Currency of Information —

This update was issued on 4 October 2016 and please note that changes in circumstances after the publication of material or information may impact upon its accuracy and also change regulatory compliance obligations.

Disclaimer —

The statements, regulatory and technical information contained herein are believed to be accurate and are provided for information purposes only. Readers are responsible for assessing its relevance and verifying the accuracy of the content. To the fullest extent permitted by law, ADIA will not be liable for any loss, damage, cost or expense incurred in relation to or arising as a result of relying on the information presented here.

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